SAN FRANCISCO, Calif. – Payment platform Square, Inc. has launched a beta program offering payment for select CBD product vendors. Cannabis journalist Tom Angell on Forbes.com revealed the invite-only program, in May.
“Square is currently conducting an invite-only beta for some CBD products,” a company spokesperson told Angell and other media outlets, at the time.
The cannabis and hemp industries ability to conduct business in the United States is greatly hindered by federal regulations, which do not allow hemp- or cannbis-related businesses to use federally-insured banks. This leaves vendors in the unusual position of restricting their business transactions to cash-only or utilizing payment processors with inflated rates that often prove unreliable for long-term use.
Representative Ed Perlmutter (D-CO) has for several years lobbied Congress as the sponsor of the Secure and Fair Enforcement (SAFE) Banking Act, which would prevent banks from being penalized for doing business with legal cannabis businesses, thus allowing access for industry members to banking services at federally-insured institutions.
“Currently, hundreds of licensed and regulated businesses do not have access to the banking industry and are unable to accept credit cards, deposit revenues, or write checks to meet payroll or pay taxes,” said cannabis advocacy organization NORML in a public comment regarding the SAFE Banking Act.
“This situation is untenable. No industry can operate safely, transparently, or effectively without access to banks or other financial institutions. Congress must move to change federal policy so that these growing number of state-compliant businesses, and their consumers, may operate in a manner that is similar to other legal commercial entities,” the statement continued.
Pressure for legislators to arrive at a resolution on banking has increased since the passage of the 2018 Farm Bill, which includes legislation allowing the cultivation of hemp crops and effectively removes hemp-derived products from the Drug Enforcement Agency’s schedule of controlled substances. The bill received bi-partisan support led by Senate Majority Leader Mitch McConnell (R-KY), who authored parts of the legislation.
Calls for Senate to take action on banking regulation are coming not only from cannabis industry advocates, but mainstream trade organizations including the “American Bankers Association, the Credit Union National Association, and the Independent Community Bankers of America.
“State attorneys general from thirty-eight states joined in support of the [SAFE Act] bill this month, as did the National Association of State Treasurers,” added a recent report on Barrons.com.